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on Innovation |
| By: | Carolin Nast; Tom Broekel; Doris Entner |
| Abstract: | This study investigated two major trends shaping contemporary technological progress: the growing complexity of innovation and the increasing reliance on government support for private research and development (R&D). We analyzed United States patent data from 1981 to 2016 using structural vector autoregressions and uncovered an indirect interplay between these trends. Our findings showed that government incentives and support played a crucial role in spurring private-sector innovation. This government-fueled innovation, in turn, paved the way for advancements in more intricate and sophisticated technological areas. Our study sheds light on the dual role of the United States' innovation policy over the past four decades; the policy has not only accelerated technological advancement but also steered it toward increasingly complex domains. While this trend presents opportunities for economic growth and technological breakthroughs, it also poses challenges, including the potential for further escalating R&D costs. This research has significant implications for policymakers and industry leaders, suggesting a need for a balanced approach to fostering innovation while considering the long-term economic and technological landscape. |
| Keywords: | Innovation, patents, technological complexity, government R&D |
| JEL: | O31 O33 O38 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2407&r=ino |
| By: | Blind, Knut; Münch, Florian |
| Abstract: | To examine the different roles of regulation and standards in the age of globalisation, we hypothesize and investigate the relation of regulation and national and international standards on the one hand with innovation input (R&D expenditure) and innovation output (patents) on the other hand. The analysis is based on data of 26 high-income countries between 1998 and 2018. There are two main results. Firstly, international standards outperform both de-regulation and national standardisation as they are positively associated with R&D expenditure and patenting. On the other hand, national standards – once believed a source of competitiveness – are negatively related to patents and hence seem to localize economies and slow-down innovation. Secondly, de-regulation does not correlate positively with R&D expenditure, but with increased patenting. We argue the former suggest businesses did not – as assumed – spend freed up resources on R&D, but instead strategically used patenting to replace lost regulation-based protection with patent fences. This casts doubts on the added social value of de-regulation induced innovation. |
| Keywords: | globalization; innovation; patents; R&D; regulation; standardization |
| JEL: | R14 J01 N0 |
| Date: | 2024–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122260&r=ino |
| By: | Jose-Miguel Benavente; Claudio Bravo-Ortega; Pablo Egaña-delSol; Bronwyn H. Hall |
| Abstract: | We analyze how expropriation risk reduces incentives for innovation and reallocates resources from the innovative sector, building on Romer’s(1990) model. Our framework predicts the R&D expenditure, the share of human capital in R&D, the number of patents, technical progress, and economic growth are all lower due to lower expected profits and patent devaluation in the presence of expropriation risks. Empirical analyses, based on a LASSO Instrumental Variable approach and a novel comprehensive dataset spanning nearly two decades, confirm our theoretical predictions. We find robust evidence that expropriation risk, such as corruption, negatively impacts innovation by reducing R&D expenditure, human capital in R&D, number of patents, scientific publications, and the Economic Complexity Index, which is our proxy for technical progress. These findings highlight the detrimental effects of expropriation risk on innovation and economic development at the country level. |
| JEL: | O17 O30 O50 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32288&r=ino |
| By: | Andrés Rodríguez-Pose; Zhuoying You; |
| Abstract: | Artificial intelligence (AI) and robotics are revolutionising production, yet their potential to stimulate innovation and change innovation patterns remains underexplored. This paper examines whether AI and robotics can spearhead technological innovation, with a particular focus on their capacity to deliver where other policies have mostly failed: less developed cities and regions. We resort to OLS and IV-2SLS methods to probe the direct and moderating influences of AI and robotics on technological innovation across 270 Chinese cities. We further employ quantile regression analysis to assess their impacts on innovation in more and less innovative cities. The findings reveal that AI and robotics significantly promote technological innovation, with a pronounced impact in cities at or below the technological frontier. Additionally, the use of AI and robotics improves the returns of investment in science and technology (S&T) on technological innovation. AI and robotics moderating effects are often more pronounced in less innovative cities, meaning that AI and robotics are not just powerful instruments for the promotion of innovation but also effective mechanisms to reduce the yawning gap in regional innovation between Chinese innovation hubs and the rest of the country. |
| Keywords: | AI, robotics, China, technological innovation, territorial inequality |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2406&r=ino |
| By: | Timothy R. Wojan; Stephan J. Goetz; Zheng Tian; Luyi Han |
| Abstract: | The study of grassroots design—applying structured, creative processes to the usability or aesthetics of a product without input from professional design consultancies—remains under investigated. If design comprises a mediation between people and technology whereby technologies are made more accessible or more likely to delight, then the process by which new grassroots inventions are transformed into innovations valued in markets cannot be fully understood. This paper uses U.S. data on the design orientation of respondents in the 2014 Rural Establishment Innovation Survey linked to longitudinal data on the same firms to examine the association between design, innovation, and employment and payroll growth. Findings from the research will inform questions to be investigated in the recently collected 2022 Annual Business Survey (ABS) that for the first time contains a Design module. |
| Keywords: | innovation, research methods, inclusive design, evaluation |
| JEL: | C51 O31 R11 Z11 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-17&r=ino |
| By: | Panteleimon Kruglov; Charles Shaw |
| Abstract: | This study explores the relationship between R&D intensity, as a measure of innovation, and financial performance among S&P 500 companies over 100 quarters from 1998 to 2023, including multiple crisis periods. It challenges the conventional wisdom that larger companies are more prone to innovate, using a comprehensive dataset across various industries. The analysis reveals diverse associations between innovation and key financial indicators such as firm size, assets, EBITDA, and tangibility. Our findings underscore the importance of innovation in enhancing firm competitiveness and market positioning, highlighting the effectiveness of countercyclical innovation policies. This research contributes to the debate on the role of R&D investments in driving firm value, offering new insights for both academic and policy discussions. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.10982&r=ino |
| By: | Bronwyn H. Hall; Jacques Mairesse |
| Abstract: | We use a large dataset of approximately 1500 physicists employed by the Centre National de la Recherche Scientifique (CNRS) in France to investigate the role of cumulative advantage in their publication career. Measuring output by time series of the number of publications and the number of cite-weighted publications for each physicist, we find that the simple stylized facts predicted by cumulative advantage hold only weakly for these physicists. However, regressions with fixed effects, life cycle effects, and past productivity provide strong evidence that cumulative advantage matters for future productivity. In future work, we plan to compare this sample with those from other countries that have different systems for the conduct of scientific research. |
| JEL: | J24 M5 O31 O38 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32285&r=ino |
| By: | Weder, Rolf; Bentele, Riccardo |
| Abstract: | Real-world data (RWD) are an increasingly important input into the pharmaceutical R&D process as shown by countries like the USA or Finland. As the availability of and access to Swiss RWD is rather limited, the question arises whether this creates a burden for pharmaceutical R&D in Switzerland. We build on the economics of data and ideas as well as the home-market effect to analyze the importance of local RWD in the three stages of pharmaceutical R&D (pre-clinical, clinical, and post-approval re-search) as well as in the field of personalized medicine. We find qualitative support for a home-market effect and conclude that there is an urgent need to improve the current RWD situation in Switzerland, from the perspective of both Swiss patients and pharmaceutical R&D in Switzerland. |
| Keywords: | Patient Data, Real-World Data, Pharmaceutical R&D, Data and Innovation, Home-Market Effects, International Trade, Location of R&D |
| JEL: | F1 O3 L65 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2024/02&r=ino |
| By: | Olimpia Cutinelli Rendina (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Collège de France - Chaire Economie des institutions, de l'innovation et de la croissance - CdF (institution) - Collège de France); Sonja Dobkowitz (Universität Bonn = University of Bonn); Antoine Mayerowitz (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Collège de France - Chaire Economie des institutions, de l'innovation et de la croissance - CdF (institution) - Collège de France) |
| Abstract: | How do firms respond to rising environmental concerns of consumers? We investigate this question for the automotive industry in the US using a shift-share instrumental variable approach. We construct a novel dataset at the firm-level to instrument changes in household preferences with natural disasters. Our findings suggest that firms not only engage in cleaner innovation but also increase their lobbying on environmental topics. We show that the increase in environmental lobbying and clean patenting follow the same dynamics which points to a complementarity between the two strategies. These results can be understood as firms using lobbying to increase the value of clean patents: higher environmental standards tailored to the firm's new clean technologies diminish the competition the firm faces. |
| Date: | 2024–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04502992&r=ino |
| By: | Harrigan, James; Reshef, Ariell; Toubal, Farid |
| Abstract: | We study the impact of techies — engineers and other technically trained workers — on firm-level productivity. We first report new facts on the role of techies in the firm by leveraging French administrative data and unique surveys. Techies are STEM-skill intensive and are associated with innovation, as well as with technology adoption, management, and diffusion within firms. Using structural econometric methods, we estimate the causal effect of techies on firm-level Hicks-neutral productivity in both manufacturing and non-manufacturing industries. We find that techies raise firm-level productivity, and this effect goes beyond the employment of R\&D workers, extending to ICT and other techies. In non-manufacturing firms, the impact of techies on productivity operates mostly through ICT and other techies, not R\&D workers. Engineers have a greater effect on productivity than technicians. |
| Keywords: | productivity, R&D, ICT, techies, STEM skills |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:2401&r=ino |
| By: | Mariarosaria Comunale; Andrea Manera |
| Abstract: | We review the literature on the effects of Artificial Intelligence (AI) adoption and the ongoing regulatory efforts concerning this technology. Economic research encompasses growth, employment, productivity, and income inequality effects, while regulation covers market competition, data privacy, copyright, national security, ethics concerns, and financial stability. We find that: (i) theoretical research agrees that AI will affect most occupations and transform growth, but empirical findings are inconclusive on employment and productivity effects; (ii) regulation has focused primarily on topics not explored by the academic literature; (iii) across countries, regulations differ widely in scope and approaches and face difficult trade-offs. |
| Keywords: | Artificial Intelligence (AI); labor market; task exposure; productivity; regulation; governance. |
| Date: | 2024–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/065&r=ino |
| By: | Arnold, Torben |
| Abstract: | As the demands on German foreign and security policy increase in a Europe characterised by multiple crises, so do the demands on the German armed forces. In order for the Bundeswehr to become more assertive and effective as a deterrent, despite limiting factors such as personnel and materiel shortages, it must be able to employ new technologies more quickly and extensively. The faster and more effectively these technologies are harnessed, the more advantages they will bring on the battlefield. The current political will for change, the pressure to adapt due to the evolved security situation and the increase in financial resources are creating an unprecedented momentum. |
| Keywords: | German foreign and security policy, Bundeswehr, personnel and materiel shortages, artificial intelligence (AI), unmanned systems, loitering munition |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:swpcom:289475&r=ino |
| By: | Hertrich, Tobias Johannes; Brenner, Thomas |
| Abstract: | In Europe, there is an increasing shortage of skilled workers and jobs remain vacant for long periods of time. The shortage of skilled workers has become a key issue for various stakeholders, as it not only makes it difficult to recruit and retain employees, but it is also seen as a significant barrier to innovation for companies. So far, most analyses of skills shortage take place at company level. We supplement this with a regional perspective, because many measures, especially those of policy makers, are conducted on the regional level. We examine the impact of skills shortage on various aspects of regional economic development. Using the spatial vector autoregressive panel model, significant effects on gross domestic product (GDP), employment are found, but not on research and development (R&D) activities. Expert interviews are used to dig deeper into the reasons for these findings, showing that the disadvantages of skills shortages on innovativeness are perceived, but relate to the future or to the more general economic situation. |
| Abstract: | In Europa herrscht ein zunehmender Mangel an qualifizierten Arbeitskräften, und Stellen bleiben über lange Zeiträume unbesetzt. Der Fachkräftemangel ist für verschiedene Interessengruppen zu einem zentralen Thema geworden, da er nicht nur die Einstellung und Bindung von Mitarbeitern erschwert, sondern auch als erhebliches Innovationshemmnis für Unternehmen angesehen wird. Bislang wurden die meisten Analysen des Fachkräftemangels auf Unternehmensebene durchgeführt. Wir ergänzen dies um eine regionale Perspektive, da viele Maßnahmen, insbesondere die der politischen Entscheidungsträger, auf regionaler Ebene durchgeführt werden. Wir untersuchen die Auswirkungen des Fachkräftemangels auf verschiedene Aspekte der regionalen Wirtschaftsentwicklung. Unter Verwendung des räumlichen vektorautoregressiven Panelmodells werden signifikante Auswirkungen auf das Bruttoinlandsprodukt (BIP) und die Beschäftigung festgestellt, nicht jedoch auf die Forschungs- und Entwicklungsaktivitäten (FuE). Experteninterviews werden genutzt, um die Gründe für diese Ergebnisse zu ergründen, und zeigen, dass die Nachteile des Fachkräftemangels für die Innovationsfähigkeit zwar wahrgenommen werden, sich aber auf die Zukunft oder die allgemeine Wirtschaftslage beziehen. |
| Keywords: | skills shortage, regional development, regional innovativeness, mixed methods |
| JEL: | O10 O30 J23 J21 J11 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:289434&r=ino |
| By: | Joshua S. Gans |
| Abstract: | This paper surveys the relevant existing literature that can help researchers and policy makers understand the drivers of competition in markets that constitute the provision of artificial intelligence products. The focus is on three broad markets: training data, input data, and AI predictions. It is shown that a key factor in determining the emergence and persistence of market power will be the operation of markets for data that would allow for trading data across firm boundaries. |
| JEL: | L15 L40 O34 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32270&r=ino |
| By: | Stamegna, Marco; Bonaiuti, Chiara; Maranzano, Paolo; Pianta, Mario |
| Abstract: | In the last ten years, military expenditures of NATO EU countries (according to NATO definitions and data) have increased by almost 50%, from €145 billion in 2014 to a budget forecast of €215 billion in 2023 (measured in constant 2015 prices). In this context, it is important to assess the economic consequences that the current increase in military spending is likely to have on Europe’s economies. We focus on Germany, Italy and Spain, and we concentrate on arms acquisitions. The article investigates the economic effect of military expenditure on growth and employment and compares it to the impact that could emerge from a similar expenditure for education, health and the environment. We use an input-output methodology – already adopted by several studies - to assess the relevance of imports and of demand towards different sectors providing intermediate inputs. We assess the likely impact on output and jobs of one billion euros of extra spending in arms, and compare it to the outcomes of the same amount spent in education, health and the environment. Our findings show that for all countries non-military public expenditures have a greater impact on the economy and employment than spending for arms acquisition. |
| Keywords: | Military expenditure; arms acquisition; input-output; economic impact; military jobs |
| JEL: | C67 D57 H50 H56 Q50 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120608&r=ino |
| By: | Florentine Schwark; Andreas Tryphonides |
| Abstract: | How does digitalization transform the macroeconomic production function? Within an endogenous technology choice framework, we find that sectors with more digital capital exhibit a higher elasticity of substitution between value-added and intermediate inputs and within value-added, between capital and labor. The shift in the elasticity of substitution is consistent with a higher complementarity of input-specific productivities. We also find that digitalization contributes to Hicks-neutral technical change in value added. Not all types of digital capital have a significant impact on the production function. |
| Keywords: | Digitalization, Elasticity of substitution, Productivity, Endogenous technology choice, Technology frontier |
| JEL: | E23 E25 O33 |
| Date: | 2024–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:02-2024&r=ino |